AfCFTA to inspire rebound: Govt
GOVERNMENT has moved to allay private sector concerns that the African Continental Free Trade Area (AfCFTA) would knock them out of business as high quality, competitively-priced products flood the domestic space.
AfCFTA was established on January 1, 2021, creating a market of 1,3 billion people with US$3 trillion combined gross domestic product.
“I would like to allay private sector fears on unfair trade practices that might arise as a result of trade liberalisation under the AfCFTA by assuring them that the AfCFTA agreement has provisions on trade remedies to defend domestic industries against unanticipated import surges, dumping or subsidised imports, if necessary,” Deputy Foreign Affairs and International Trade minister David Musabayana said during a meeting to discuss AfCFTA.
“Government is committed to working closely as partners with local companies, women and youths and other relevant stakeholders to take advantage of the opportunities to be created by AfCFTA as espoused in the national implementation strategy for AfCFTA, which will be launched soon. Existing structures will be strengthened to ensure proper implementation of the AfCFTA agreement,” Musabayana added.
The Zimbabwe National Chamber of Commerce (ZNCC) said during the meeting that members were worried about the inability to process and export finished products.
“The domination of primary commodities which is 75% of the export basket shows a sorry state of affairs,” ZNCC president Tinashe Manzungu said.
“The agenda remains to move up the value chain and be involved in value addition,” Manzungu said.
Zimbabwean trade experts have said while the big bloc presents opportunities for growth, weak economies will still require some levels of protection to avoid the collapse of fragile industries.
That may be a diversion from the tenets of free market economics being pursued worldwide.
But the worry is that an avalanche of cheaper goods is expected to flow into the domestic markets as the bloc takes shape and this would present the biggest threat to domestic industries that have been manufacturing goods at high cost.
Economists have predicted that these firms would struggle to ship goods to the market at competitive prices.
Besides, the quality of domestic products has been compromised by lack of capital and old industrial machinery, all of which may force the market to rely on imported products.
“To some extent this (AfCFTA) is a timely initiative to the economy as it forces local industries to innovate with speed in matching up with regional competition,” said investment analyst Enock Rukarwa recently.
“On the downside, Zimbabwe as a whole is still an infant industry requiring some level of protectionism for it to survive. More so because the country is using a strong currency, the United States dollar. This situation makes our exports relatively more expensive compared to other African countries. Devaluation of a currency is usually encouraged to promote exports,” said Rukarwa.
Musabayana said some of industry’s concerns would be addressed through an AfCFTA implementation strategy to be launched soon. — Staff Writer.